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Interagency Memorandum of Understanding: Retiree Insurance Benefits
Class Action Against State of Michigan: Taxation of State Pensions (Okrie vs State of Michigan)
Latest Update: July 9, 2017
As you may well know, filing a Petition for a Writ of Certiorari was hardly a certainty after the Michigan Supreme Court denied my Motion for Reconsideration on April 4, 2017 from its order denying my Application for Leave to Appeal from the Court of Appeals' opinion affirming the dismissal of the Okrie class-action lawsuit. At that point, there was only one available option: filing a Petition for a Writ of Certiorari with the U.S. Supreme Court by July 3, 2017, seeking review by the highest court in the land or let the case come to an end. As I previously stated, "[t]his will require funding from you and anybody else that believes that a great injustice has been done in this matter. Otherwise, the case will end here." As it turned out, Mr. Thomas R. Okrie refused to let this case die and began a fund-raising campaign seeking matching funding for his own personal contribution in order to pay me to do the work, as well as the costs of the filing (it isn't cheap going to the U.S. Supreme Court). Given his efforts, I agreed to go forward with the work on the Petition so that it could be filed before the deadline date. The work on the Petition was completed at the end of June and submitted to the editor, Supreme Court Press in Boston, for ediiting and publication. On June 28, 2017, the Petition was filed with the U.S. Supreme Court.
I have posted the Petition that I submitted to the editor. Essentially, it poses one question, with two parts: Does the application of 2011 PA 38 to Mr. Okrie, et al. violate the principles of retroactivity stated in the U.S. Supreme Court's decision in Landgraf v USI Film Prods., 511 U.S. 244 (1994) and the principles underlying the rule of law? The question itself is quite simple. When Mr. Okrie and other members of the class-action lawsuit made irrevocable retirement decisions and calculated their total retirement benefits, they acted on the legal basis that their pensions were exempt from state and local taxation. That is what the statute said at the time of their retirement. That was what the Court of Appeals held in Davis v. Dep't of Treasury, 178 Mich. App. 683 (1989) after remand from the U.S. Supreme Court in Davis v. Michigan Dep't of Treasury, 489 U.S. 803 (1989). And that was what the Attorney General for the State of Michigan essentially confirmed in a formal opinion in 1991, binding upon the Office of Retirement Services, when asked whether the Michigan Legislature could eliminate the tax exemptions for retired state employees. This legal basis was left undisturbed for 20 years during which time Mr. Okrie and many others retired, with the full legal expectation that their vested rights to pension benefits were exempt from state and local taxation. Well, you all found out otherwise when the Michigan Legislature enacted 2011 PA 38, signed by Governor Snyder, and started to tax your pension benefits on January 1, 2012, with the approval of the Michigan courts. The question, however, is which law should apply? The "old law" under which Mr. Okrie and others retired, or the "new law" that did not take effect until January 1, 2012. For reasons that I outline in the Petition, it is clear to me that the new law cannot be applied retroactively to Mr. Okrie, et al. without offending the principles against retroactivity and the law of rule itself.
The lawsuit is now docketed with the U.S. Supreme Court as Case No. 17-34. The Court has asked the State of Michigan for a Response by August 5, 2017. We shall see if the State deigns to reply. In the meantime, I shall keep up the postings about the lawsuit until the U.S. Supreme Court's decides whether to grant or deny the Petiton. As always, I reiterate my appreciation for any monetary contributions to this cause.
In November state retirees were mailed a Retiree Benefits Bulletin that explained the Prescription Drug Manager change for retirees enrolled in the State’s Health Plan PPO. Retirees should read that bulletin that explains the Prescription Drug Manager change.
A recent letter (dated 11/30/16) from GenerationRx has caused a lot of confusion among our Medicare retirees. The first paragraph of the letter states this letter is to confirm your disenrollment from Medicare GenerationRx effective January 1, 2017. This statement has caused a lot of confusion among retirees because they think they will no longer have prescription drug coverage after the first of the year. The confusion is further exacerbated by the rest of the letter that tells the retiree that they must enroll in another Medicare Prescription Drug Plan.
Medicare-eligible State Retirees are already enrolled in the OptumRx Medicare Part D Prescription Drug Plan. The enrollment in the Optum Rx plan is automatic if the retiree was already enrolled in the State’s Health Plan PPO. The new prescription plan is effective January 1, 2017. Retirees should be receiving a welcome packet and new ID cards from OptumRx in the middle of December. If you do not receive the packet/ID cards prior to December 31, please call OptumRx at 866-635-5941 to assist you.
After talking to Lauri Schmidt (Employee Benefits Director), Michigan SERA Council Chair Bob Kopaz learned that this disenrollment letter is required by Medicare rules and is pretty confident that if Lauri had had any input into the information in the letter it would not have caused this much confusion.
SERA is committed to providing exceptional value to its members by delivering quality financial products and services to our members through our SERA Plus program. Consistent with our philosophy, we are pleased to announce that financial planning, investment, insurance (including auto, home and liability), tax planning, estate planning advice, and banking services will soon be offered exclusively through our relationship with Hantz Group, Inc., and its affiliates (together, “Hantz”), headquartered at 26200 American Drive, Southfield, Michigan 48034.
Our decision to offer financial planning, investment, insurance, tax planning, estate planning advice, and banking services through Hantz allows us to provide you with a variety of financial services under one roof. Hantz Group, along with its affiliates, Hantz Tax & Business, LLC, Hantz Agency LLC and Hantz Bank, to name a few, provides a comprehensive approach to your specific financial service and banking needs. Hantz will offer and provide its services through its 21 locations conveniently located near most of our chapters throughout Michigan.
About Michigan SERA
SERA is an non-profit organization devoted exclusively to issues and concerns of all current and future retirees of the State of Michigan.
SERA works to:
SERA works through its members, leaders, and committees to promote the best interests of state employee retirees and future retirees. At least eight times since 1974, SERA was a moving force in pension increases or benefit improvements. In 2011, we opposed the pension tax and helped eliminate it for 70% of retirees; we opposed the remaining tax on public pensions for those born after 1945 in the Michigan Supreme Court. We opposed the recent state employee retirement system changes. That work continues.
SERA has 21 local chapters statewide that are linked through the Coordinating Council of the State Employee Retirees Associations of Michigan (the SERA Coordinating Council). SERA chapters have periodic meetings with guest speakers, opportunities for networking, newsletters, and other activities.
SERA welcomes the new ideas and energy of new members! To join, contact Cheryl Streberger at 517-515-9815 or firstname.lastname@example.org.